ACCT20100 Chapter Notes - Chapter 5.3: Asset, Intangible Asset, Gross Margin

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18 Oct 2016
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Additional characteristics of financial statements: 1. Comparative financial statement: used to compare performance from period to period report the data from the current and one or more prior periods: 2. Additional subtotal and classifications for financial statements: slightly different statement formats between companies: 3. Additional disclosures: use of voluminous notes that are necessar(cid:455) to u(cid:374)dersta(cid:374)d a (cid:272)o(cid:373)pa(cid:374)(cid:455)"s perfor(cid:373)a(cid:374)(cid:272)e a(cid:374)d financial condition. Intangible assets: have no physical existence and a long life patents, trademarks, copyrights, franchises, and goodwill from purchasing other companies. Most are amortized as they are used in a manner similar to the depreciation of tangible assets . Amortization expense is debited and the contra-asset accumulated amortization is credited. Just as tangible fixed assets are reported net of accumulated depreciation, intangible assets are reported net of accumulated amortization on the balance sheet. Goodwill is a more general intangible asset representing the excess of the price paid for another company over the value of its identifiable assets.

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